Because there was nothing in the law prohibiting literacy tests, they were used to keep African Americans from voting for over 100 years. It ended this day in 1965 when the Voting Rights Act was signed into law.

The use of that loophole says a lot about the culture of the US from 1850 to 1965. The fact that a law was necessary to close that loophole says a lot about the culture that still existed in 1965.

If you want to know what kind of culture you have in your organization today, look at your policies, rules and procedures. Then look at how people circumvent them. And finally look at how you try to prevent recurrence. Each look will give you a richer understanding of your culture.

From time to time, I receive from an employee a complaint that I can’t solve.

They behaved their way into a tough situation and now claim that the natural consequences of that behavior are not fair.

Almost every time, there are health issues or marital problems or a financial crisis or all of these things at once crushing the employee and leading to the improper behavior at work.

They believe, to their core, that the organization was unfair to them. Most believe that life is unfair, that they were dealt a bad hand, that they had no choice but to engage in wrongdoing.

Life is not unfair. Life is random. Our job is to deal with reality, not to wish for a different one.

I just started to write a guide to help supervisors create a positive organizational culture.

After describing in the guide the negative effects that emotional and financial pressures can have on ethical behavior, I asked myself “Is all pressure bad?”

I got stuck. I knew from experience that pressure had helped me reach some of my most difficult goals. But I was also familiar with the science showing how pressure leads to fraud and how it destroys adaptive performance.

So I called a friend at Vega Factor and asked him the same question. His thoughts got me unstuck. He offered the following: “Pressure is just pressure. It’s not good or bad. The real question is: how do you respond to it? Do you radiate it (i.e. make it worse and infect your team with it) or do you leverage it (i.e. use it as an opportunity to learn, to drive change, to reset)?

I could almost hear Hamlet say “for nothing is either good or bad, but thinking makes it so.”

Back to writing my guide.

Some organizations treat their employees like family (e.g. VaynerMedia).

Some organizations treat their employees like a sport team (e.g. Netflix).

Some organizations treat their employees like replaceable cogs in a machine.

In all cases, employees are a community. There are bonds tying them together. No matter how few or weak these bonds are, employers have a moral obligation not to break them.

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Hat tip to Isabel Berwick

If you have good news about our program, give it to us straight, even if it means we won’t have to hire you to fix anything.

If you have bad news about our program, give it to us straight, even if you don’t know how to fix it, even if you think it will upset us.

I feel more strongly about the second request. We need to hear the bad news. We hired you because we want to improve. We need to know where our weaknesses are. It’s OK if you don’t know how to fix it right now because we knowing about the problem has already solved a part of it.

Your obligation to talk straight is the consultant’s version of “speaking up”.

Today I am meeting with Finance colleagues to kick off the annual COSO exercise. Over the next few weeks, we will collaborate to ensure that we have a robust ERM process.

Our E&C function exists to reduce risk. We do so by creating a robust compliance program and a strong ethical culture. COSO offers a great model to do both.

We can attempt to build a healthier organization by reacting to attacks or we can prepare before they materialize. The latter offers greater protection.

My mentor explained the difference between compliance and ethics this way: “Compliance answers the question ‘Can we?’ Ethics answers the question ‘Should we?'”

The implicit instruction is that we must ask the second question after we’ve answered “Yes” to the first one.

As we start to appreciate the importance of corporate culture, I suggest that there is a third question: “How will it affect our culture?”

This third question forces us to think about how we will implement our decision. Our goal may be legal, it may be the right thing to do, but there might be a number of ways it can be accomplished. Some ways might improve the organization’s culture while others might hurt it.

To quote Dov Seidman, “How we do things matters as much as what we do.”